Archive for May, 2013

According to the Mainichi Shimbun, as of May 13, the holders of seven winning ¥100 million lottery tickets that were sold last year for the Dream Jumbo Takarakuji have yet to claim their prizes, and if they don’t claim them by June 17 the tickets will become void. The media is cooperating by actually printing the names of the locations where the seven tickets were purchased in an effort to jog the memories of people who may have bought them but for reasons unknown have forgotten all about it. Being a responsible social medium, we here reprint these locations in the unlikely event that one or more of our readers happens to belong to this select group: The Koriyama branch of Mizuho Bank in Fukushima Prefecture; the TFC Kita Asaka TK Shop in Saitama City; the Nishi Ginza Chance Center and the Yotsuya Dream Center in Tokyo; the Hiratsuka branch of Mizuho Bank and the Yokohama Porta Chance Center in Kanagawa Prefecture; and the Tenmonkan Chance Center in Kagoshima Prefecture. To check the details and the winning numbers (in Japanese only), go here. The site also includes information about unclaimed prizes from more recent lotteries.

This is not, apparently, an unusual development. Since 2009, ¥20.1 billion worth of winning lottery tickets have become void because their holders did not redeem them by the deadline, which is one calendar year after the winning numbers are selected by computer. Included in this loot are 25 tickets that were worth at least ¥100 million. Since Takarakuji lotteries do not carry over, the money becomes the property of whichever local government presides over the place where the winning ticket was sold, so it’s not as if the money becames a complete waste. The free media publicity may have another purpose. Sales of Takarakuji have been dropping steadily for the last few years and the operators want to keep awareness of the lottery alive. In fact, the failure of some lottery buyers to check their tickets for winning numbers could be considered a symptom of the game’s loss of cultural topicality. As with the squirrel that works hard to hoard nuts for the winter and then forgets where it hid them, all the excitement is in the acquisition.

About a year ago we reported on a proposed dog tax in the city of Izumisano in Osaka Prefecture. The purpose of the levy was to pay for patrols to enforce a local law mandating that dog owners clean up after their pets. The city’s mayor, Hiroyasu Chiyomatsu, says that because Izumisano is close to Kansai International Airport, the city is a “gateway to Japan” and thus it is embarrassing if the first thing visitors see is dog doo all over the streets.

As it happens, the tax was never passed, since dog owners complained that it was only a minority who broke the law and thus was unfair to punish all of them for the sins of a few. In addition, once it was announced that the patrols were going into effect, the problem actually got worse, since some dog owners misinterpreted the measure to mean that they could leave the droppings behind because the city would be cleaning it up.

So in February the city announced a new strategy. Pairs of inu no fun G-men (dog feces government men) would patrol the city in public vehicles three days a week and whenever they saw droppings on the ground they would place a yellow card on them and leave it there.

If the droppings weren’t picked up for a month, then the G-men would clean it up. The idea is that dog owners tend to walk their pets along the same routes and so will likely see the yellow card and feel guilty enough to clean it up themselves. Only ¥4.6 million has been budgeted for the program, so in order to save money the patrols will be made up of individuals from the local Retired Persons Human Resource Center, whose average age is 75.

So far, the plan seems to be working. In the month before it went into effect, patrols counted 1,736 spots where droppings were left behind, and in the month after it went into effect the number of spots numbered 1,030. Fines will likely go into effect in July.

The ¥1,000 penalty, however, can only be issued when a dog owner is caught in the act — or non-act, in this case. Such issuances may be even be rarer since the patrols only go out in the early morning and late evening. As it stands, many local governments throughout Japan have similar fines for negligent dog owners but few actually collect any money.

There are also other pet problems that the town wants to address, including non-registration of dogs — estimated to be about half — and people who walk their dogs without leashes. About 4,400 people are bitten by dogs every year in Japan.

This spring the big news for train lovers was the integration of almost all the regional IC card services, thus making it possible to travel from one region to another on lines operated by different companies using a single IC fare card. But while computer systems have been linked successfully to allow for such inter-line transfers, one element of the changeover that has bothered public officials remained problematic: the non-integration of fares.

In some instances it actually costs more to go from point A to point B using an IC card than it does with a ticket, though most patrons aren’t aware of the fact. It depends on which lines you are using. For instance, if you are going from JR Kameari Station on the Joban Line in eastern Tokyo to JR Yokohama station and buy a ticket for the whole trip, it costs you ¥780. However, if you take the same route and use an IC card, ¥910 will be subtracted from your card balance. That’s because the Joban line turns into the Chiyoda subway line, which is operated by Tokyo Metro, after it passes Kita Senju, and the passenger then leaves the Chiyoda Line at Nishi Nippori and transfers back to JR in order to proceed on to Yokohama.

The ticket you buy from a vending machine takes these transfers into consideration and simply charges the zone-related JR fare between Kameari and Yokohama plus the Metro fare. But the IC card system doesn’t make such a distinction and each of the three legs of the journey is charged separately, meaning you pay two JR fares, one from Kameari to Kita Senju and another from Nishi Nippori to Yokohama, plus the ¥160 for the Chiyoda line between Kita Senju and Nishi Nippori.

The sticking point is JR East, and in Diet discussions about the IC fare discrepancy representatives of the company have said it’s a computer-related problem that they have yet to figure out, claiming that any changes to rectify the problem would “place on the system more of a burden” that might cause even more issues.

At the urging of Your Party the company did say it would make more of an effort to inform patrons of price differences where they occur. The various JR companies offer the Suica card system, but the equally popular Pasmo card has the same problem. In the Tokyo Metropolitan Area 80 percent of riders use one card or the other.

The problem is limited to transfers between JR and other lines. Other inter-line transfers don’t have the same problem. In fact, discounts that are normally offered to ticketed riders between the two Tokyo subway lines are integrated into the IC card fare structure, even when passengers leave one line through a wicket and enter the other through a different wicket. A transportation expert, discussing the problem in Tokyo Shimbun, said that such a change shouldn’t require a major system overhaul, and, in fact, JR recently announced it would make it possible for IC cards to subtract amounts of less than factors of ¥10 in line with the consumption tax increase, which means amounts of factors of ¥1 can be charged, but only if the patron has an IC card. Fares for tickets will still be rounded up to a factor of 10.

The fact is, the ticketing system costs operators more than the IC card system, which is why in London you pay less if you use a card than if you buy a ticket. Ideally, all patrons should use cards, so JR’s intransigence on the matter is difficult to explain.

Anyone who still owns, much less uses, a fax machine may be embarrassed by the fact. The rest of the developed world has abandoned the device, and it seems that only in Japan is its utility valued, if for no other reason that to send maps to people who still don’t know their way around Google. And the same march of technology that has rendered the fax obsolete is making land lines an unnecessary expense. Most young people who acquire their first apartments don’t bother applying for them. Their mobile phones are perfectly adequate.

What the hell is that?

So what about those of us who still have land lines? More specifically, is the kanyuken — the subscription right to the line — worth anything? Once upon a time it cost as much as ¥80,000 to have a telephone line set up in one’s name. That was the cost of the right to a subscription, a kind of investment in the country’s telecommunications infrastructure, and you carried it with you your whole life; unless you wanted to sell it, which you could do. In fact, there was a market, with agents willing to broker your kanyuken to others. Though no one ever made money off their subscription rights, some people used it as security for small loans or pawned them.

Japan started offering telephone service in 1890, but the kanyuken system didn’t begin until 1897, when it cost ¥15. However, households didn’t really start getting telephones on a major scale until after the war, and it wasn’t until the late 1960s that more than half of the country’s population had phones in their homes. Many, in fact, were party lines. By 1976, the kanyuken cost more than ¥75,000, and subscribers could pay in installments. The telephones themselves were rented not owned. NTT was privatized in 1985, at which point the price of a subscription right dropped to ¥72,000, not including tax. It’s been slowly decreasing ever since. Since 2005 it has cost ¥36,000, though you can buy it on the market for as little as ¥11,000. NTT does not and never has bought back such rights, so once you purchase it it’s yours forever unless you unload it on someone down the line, and that’s becoming increasingly difficult. Few businesses now trade in kanyuken, though we did find one on the Internet that was offering ¥1,500 for a subscription right.

Consequently, some people forget that they have kanyuken. They move house and instead of having the land line in their new abode turned on, they just use their cell. In such situations, however, you still have to tell your local NTT office that you want to keep the right to a land line. After you do that they will send you a riyo kyushi no shirase (notice to stop usage), which allows you to maintain your subscription right, but only for 10 years. If you don’t re-remind the phone company that you want to keep the right, then after 10 years it expires and the shisetsu setchi futankin (money to facilitate operations) becomes invalid. Of course, during that time if you decide to reactivate your land line then the right is automatically preserved. In fact, the phone company recommends on the notice that you contact them every five years to confirm your subscription right. You never know. Faxes may make a comeback.

Just as deposit interest rates have remained near zero for the past 20 years in Japan, housing mortgage interest rates have been lower here than almost anywhere else in the world. The effect of the latter has been almost counter-intuitive. Low interest usually spurs investment in real estate and home sales but Japan’s economic situation, not to mention its housing environment, is so odd to begin with that this hasn’t proved to be the case. Younger people thinking about buying homes have lived with low interest rates for so long that they think it’s the norm.

Last week interest rates for housing loans increased by 0.05 percent, the first rise in three months. Interest rates for loans are based on 10-year-bond interest rates. The Bank of Japan, on behalf of the prime minister, is gunning for a two percent inflation rate, and in order to achieve that goal it announced plans to buy government bonds from banks. Anticipating the BOJ’s move, investors have started to sell their bonds. When the price of bonds goes down the interest they pay goes up. More people sold bonds than the BOJ projected, which may not make the government happy since in the long run it will have to pay that interest to bondholders. If consumer prices and, in turn, salaries go up, that won’t be a problem since the government can collect more taxes as a result, but if inflation doesn’t kick in then it just means even more government debt.

Consumers are more concerned with how the change in interest rates will affect them directly. A recent article in Aera profiled a working couple in their 30s who have decided to buy a condominium in Tokyo right away in anticipation of the consumption tax rise next year. Because they both want to be near their workplaces, they settled on an area where the price of a condo that fits their lifestyle is about ¥50 million. They only have ¥3 million for a down payment, and they chose a variable interest rate because it’s lower than a fixed rate right now. Aera asked a financial planner about their situation and the planner seemed dubious.

On April 25 the Consumer Affairs Agency sent notices (pdf) to 12 nationwide retailers regarding sales of frozen foods. The CAA thinks that the way these sales are advertised purposely misleads shoppers and thus violates the Price Indication Law. The cited stores, which include supermarkets, drug stores and discount chains not named in the media, have regular bargain sales on frozen foods at savings of 30 to 50 percent off “the manufacturers’ suggested retail prices,” but as the CAA points out there is no such thing as a price suggested by the manufacturer when it comes to food. In essence, the stores are “fabricating” discounts.

Frozen food bargain sales have been commonplace for more than decade. In fact, every supermarket and discount drug store has them. They take place on a weekly basis, usually Tuesdays or Wednesdays, and regular patrons thus come to expect them, which means they rarely buy frozen food the rest of the week.

What the CAA is pointing out is that these retailers have convinced shoppers that on those days when frozen foods are “half-price” or “one-third-price” they are cheaper than they “normally” are, but what is normal in this case? The CAA only seems to have cited retailers who use the phrase “suggested manufacturers’ retail price” (kibo kagaku or kori kagaku) in their ads, but even those stores that don’t use the phrase are being cagey with the semantics: Half of what price?

According to the business magazine Toyo Keizai, wholesale prices for merchandise sold in supermarkets and discount drug stores are determined through negotiations between individual retailers and their suppliers, and no retail reference prices are mentioned, must less “suggested,” by the respective manufacturers. Traditionally, bargain sales are carried out to clear excess inventory, but that’s not the case here.

For all intents and purposes the ostensible “sale” prices are the standard ones, since the bulk of a store’s frozen foods are sold on those specified sale days. It’s the other days, when the products cost twice as much, that are the exception. The reason this strategy is applied to frozen food is because consumers are more willing to buy frozen food in bulk since they can be kept for long periods of time in the freezer. So on sale days, shoppers buy more frozen food than they would if there were no bargain sales; it’s just that they do it only once a week.

Uniqlo has applied this same strategy to clothing. Last year the chain expanded its weekly bargain sales from two days to four. Previously, the weekly sales took place on Saturday and Sunday, but now sale periods also include Fridays and Mondays, which means there is a “bargain sale” four days a week. But if you look at the matter a different way, you could simply say that on those four days Uniqlo is selling merchandise at their normal price and on the other days it is selling it at “premium prices.” It’s all in the terminology, and the thinking.